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Online Advertising Exchanges Anger Publishers

24 Mar 2011

Online publishers claim they are being pressured by media agency buying groups into giving them exclusive advertising inventory to auction to their clients or risk having their revenue allocation cut in annual group buying deals.

As reported in The Australian, senior executives at two digital publishers said that agencies including the GroupM buying group wanted publishers to give them inventory to put into their demand-side platform -- an allegation GroupM denies. Demand-side platforms are the trading desks used by online media agencies to buy ads in online advertising exchanges -- such as Google's DoubleClick exchange -- and are virtual marketplaces similar to a stock exchange that allow ads to be sold to the highest bidder in split-second auctions.

Several media agencies and groups, including WPP's GroupM, the Mitchell-Aegis group and Ikon Communications, have built or are in the process of establishing a DSP.

But publishers, who see ad exchanges as a way for buyers to push down prices, say some buying groups want to treat their DSPs as mini-ad exchanges on which only that group's clients can trade, and are demanding exclusive inventory to sell.

The article reported senior publishing executives -- including Nine Entertainment Co boss David Gyngell, who last week named ad exchanges as one of the things that keeps him awake at night -- are wary of selling their ad space on ad exchanges, believing their returns for remnant inventory sold on performance networks will be undercut.

The Australian reported one executive as saying. "Some groups are saying, 'If you want a volume deal from us you have to commit inventory to (our) demand-side platform'."

"They'd want 15 to 20 per cent (of the inventory they buy annually from a publisher)."

GroupM chief digital officer Danny Bass told The Australian that the claims were incorrect.

"We've had conversations with people who are our key trading partners and explained to them what our plans are, but it isn't part of being a GroupM partner that they must contribute inventory to our DSP," he said.

Mr Bass said GroupM, which will begin testing its proprietary DSP technology in Australia next month, wanted online publishers who were already selling their remnant advertising space on performance networks to participate.

"If we can work with a publisher who can provide us with everything from DSP (inventory) to video to premium inventory and good account management, it stands to reason when we're looking at the best volume partnerships they're in a good position."

GroupM traditionally does its bulk advertising deals on a financial year basis, meaning it is preparing for general ad rate negotiations next quarter.

Source: The Australian



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